Why Small Employers Are A New Goldmine Of Individual Sales

Small employers are slashing benefits to offset skyrocketing insurance costs. From 2001-2004, average yearly costs for employer-sponsored plans soared 50%...to $3,696 per single.

The expenses have been hard for employers to ignore. Jobs offering medical insurance fell 6% between 2001 and 2004 — costing 5 million people access to employer-sponsored health care.

For group producers, this means a loss in clients and a shrinking market. But if you also sell individual medical, there’s a way to turn it around into a can’t-refuse offer that will win you sales.

Selling The Small Employer On Individual Insurance

Why would an employer care about individual plans?

• Individual policies are typically much cheaper than similar coverage through an employer-sponsored plan (compare $3,696/single employer coverage to $2,268/individual coverage!).
• Employers can reimburse the employee in the amount they choose – tax-free.
• Employees get renewable plans that can follow them from job to job.
• Employees can choose their own quality coverage and doctors.

The small employer needs to be educated on the alternative ways they can contribute to their employees’ health care costs. Employer-sponsored plans have inflated costs. Individual coverage is relatively cheap.

Show the employer how they can set up a defined contribution plan. They decide how much they want to give each employee, tax-free. The employee can then use the contribution to pay for their individual plan premiums. Employees can even use the money to contribute to increasingly popular Health Savings Accounts.

You may already have a good list of small employers to work. Focus on:

• Those who have recently dropped their coverage
• Those who you quoted, but couldn’t close because of cost

These are employers who have shown interest in offering coverage to their employees — but circumstance has forced them out of it.

Before you start calling up your employer prospects, do some quick homework.

• What options are available from your carriers?
  Do they have plans tailored for employers who can’t afford traditional contributions? Some companies have already begun responding to this emerging market with new individual products, including automatic payroll premium deduction.

• Call up your regional reps and ask for their recommendations.
  You may have missed a new product your carrier has begun offering. Your reps can give you tips for working this new angle.

If you can’t close the employer, make sure they’ve got a big stack of your cards. Tell them you’d be happy to speak with any of their employees one-on-one about their insurance needs. You still might earn a few leads or sales.

Instead of losing a group client, you stand to gain several individual ones.